As earlier mortgages are paid off, the Fed ends up with a lot of loose cash on its balance sheets. It has been and will be reinvesting some in more mortgage bonds.
So far the Fed has made a lot of money off its ops and is in fact paying the taxpayers dividends. They just paid the Treasury 77 billion:
http://www.usatoday.com/money/economy/fed/story/2012-01-10/federal-reserve-pays-treasury-77B-in-2011/52482722/1
Let's not post nonsense here.
All central banks have a portfolio of securities, and usually that is concentrated in sovereign bonds. They have to have them; selling and buying is one way they control various aspects of the monetary system. Recently the Fed greatly expanded its purchases.
Central banks are BANKS. The essential business of banks is investing money on deposit for higher interest rates than the deposits command. Right now the Fed has a ton of money on deposit at very low rates, because regular banks don't have much else to do with their excess. So the Fed can make a lot of money buying mortgage bonds that pay low, because what matters to the Fed is the difference between what they have to pay for money versus what they can get by investing that money.
One of the Fed's strategies has been to keep interest rates very low to make homes more affordable, and to make the cost of funding our public debt more affordable. It is working - mortgage rates are remarkably low.
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